The World according to Friedman: 2012 Geopolitical Analysis on US, China, Germany, and Japan

Clearly, for geopolitics, 2012 did not signal the world's end, but only its tumultuous continuity. Major economies of the world had seen their governments either replaced or reestablished - Barack Obama in the United States, Xi Jinping in People's Republic of China, and Shinzō Abe in Japan. Newsweek issued its last print issue, with the iconic hashtag sounding the death knell to non-online publishing. European Union remains to be stuck in a debilitating debt crisis. The UN General Assembly approves a motion granting Palestine non-member observer state status.

From here.

As we close this year, it is but fitting to listen to one of the world's best geopolitical minds  as he speaks on the state of the world, as well as the history and future of US, China, Germany and Japan. Let us all take a peek at the important insights George Friedman of Stratfor shared to us in 2012: 

The State of the World: A Framework 
By George Friedman | February 21, 2012

Editor's Note: This is the first installment of a new series on the national strategies of today's global power and other regional powers. This installment establishes a framework for understating the current state of the world. 

The evolution of geopolitics is cyclical. Powers rise, fall and shift. Changes occur in every generation in an unending ballet. However, the period between 1989 and 1991 was unique in that a long cycle of human history spanning hundreds of years ended, and with it a shorter cycle also came to a close. The world is still reverberating from the events of that period.

On Dec. 25, 1991, an epoch ended. On that day the Soviet Union collapsed, and for the first time in almost 500 years no European power was a global power, meaning no European state integrated economic, military and political power on a global scale. What began in 1492 with Europe smashing its way into the world and creating a global imperial system had ended. For five centuries, one European power or another had dominated the world, whether Portugal, Spain, France, England or the Soviet Union. Even the lesser European powers at the time had some degree of global influence.

After 1991 the only global power left was the United States, which produced about 25 percent of the world's gross domestic product (GDP) each year and dominated the oceans. Never before had the United States been the dominant global power. Prior to World War II, American power had been growing from its place at the margins of the international system, but it was emerging on a multipolar stage. After World War II, it found itself in a bipolar world, facing off with the Soviet Union in a struggle in which American victory was hardly a foregone conclusion.

American and Soviet troops meet east of the Elbe River
(Photo credit: Wikipedia)

The United States has been the unchallenged global power for 20 years, but its ascendancy has left it off-balance for most of this time, and imbalance has been the fundamental characteristic of the global system in the past generation. Unprepared institutionally or psychologically for its position, the United States has swung from an excessive optimism in the 1990s that held that significant conflict was at an end to the wars against militant Islam after 9/11, wars that the United States could not avoid but also could not integrate into a multilayered global strategy. When the only global power becomes obsessed with a single region, the entire world is unbalanced. Imbalance remains the defining characteristic of the global system today.

While the collapse of the Soviet Union ended the European epoch, it also was the end of the era that began in 1945, and it was accompanied by a cluster of events that tend to accompany generational shifts. The 1989-1991 period marked the end of the Japanese economic miracle, the first time the world had marveled at an Asian power's sustained growth rate as the same power's financial system crumbled. The end of the Japanese miracle and the economic problem of integrating East and West Germany both changed the way the global economy worked. The 1991 Maastricht Treaty set the stage for Europe's attempt at integration and was the framework for Europe in the post-Cold War world. Tiananmen Square set the course for China in the next 20 years and was the Chinese answer to a collapsing Soviet empire. It created a structure that allowed for economic development but assured the dominance of the Communist Party. Saddam Hussein's invasion of Kuwait was designed to change the balance of power in the Persian Gulf after the Iraq-Iran war and tested the United States' willingness to go to war after the Cold War.

In 1989-1991 the world changed the way it worked, whether measured in centuries or generations. It was an extraordinary period whose significance is only now emerging. It locked into place a long-term changing of the guard, where North America replaced Europe as the center of the international system. But generations come and go, and we are now in the middle of the first generational shift since the collapse of the European powers, a shift that began in 2008 but is only now working itself out in detail.

What happened in 2008 was one of the financial panics that the global capitalist system periodically suffers. As is frequently the case, these panics first generate political crises within nations, followed by changes in the relations among nations. Of these changes, three in particular are of importance, two of which are directly linked to the 2008 crisis. The first is the European financial crisis and its transformation into a political crisis. The second is the Chinese export crisis and its consequences. The third, indirectly linked to 2008, is the shift in the balance of power in the Middle East in favor of Iran.

The European Crisis 

The European crisis represents the single most significant event that followed from the financial collapse of 2008. The vision of the European Union was that an institution that would bind France and Germany together would make the wars that had raged in Europe since 1871 impossible. The vision also assumed that economic integration would both join France and Germany together and create the foundations of a prosperous Europe. Within the context of Maastricht as it evolved, the European vision assumed that the European Union would become a way to democratize and integrate the former Communist countries of Eastern Europe into a single framework.

However, embedded in the idea of the European Union was the idea that Europe could at some point transcend nationalism and emerge as a United States of Europe, a single political federation with a constitution and a unified foreign and domestic policy. It would move from a free trade zone to a unified economic system to a single currency and then to further political integration built around the European Parliament, allowing Europe to emerge as a single country.

Long before this happened, of course, people began to speak of Europe as if it were a single entity. Regardless of the modesty of formal proposals, there was a powerful vision of an integrated European polity. There were two foundations for it. One was the apparent economic and social benefits of a united Europe. The other was that this was the only way that Europe could make its influence felt in the international system. Individually, the European states were not global players, but collectively they had the ability to become just that. In the post-Cold War world, where the United States was the sole and unfettered global power, this was an attractive opportunity.

The European vision was smashed in the aftermath of 2008, when the fundamental instability of the European experiment revealed itself. That vision was built around Germany, the world's second-largest exporter, but Europe's periphery remained too weak to weather the crisis. It was not so much this particular crisis; Europe was not built to withstand any financial crisis. Sooner or later one would come and the unity of Europe would be severely strained as each nation, driven by different economic and social realities, maneuvered in its own interest rather than in the interest of Europe.

There is no question that the Europe of 2012 operates in a very different way than it did in 2007. There is an expectation in some parts that Europe will, in due course, return to its old post-Cold War state, but that is unlikely. The underlying contradictions of the European enterprise are now revealed, and while some European entity will likely survive, it probably will not resemble the Europe envisioned by Maastricht, let alone the grander visions of a United States of Europe. Thus, the only potential counterweight to the United States will not emerge in this generation.

China and the Asian Model 

China was similarly struck by the 2008 crisis. Apart from the inevitably cyclical nature of all economies, the Asian model, as seen in Japan and then in 1997 in East and Southeast Asia, provides for prolonged growth followed by profound financial dislocation. Indeed, growth rates do not indicate economic health. Just as it was for Europe, the 2008 financial crisis was the trigger for China.

China's core problem is that more than a billion people live in households earning less than $6 a day, and the majority of those earn less than $3 a day. Social tensions aside, the economic consequence is that China's large industrial plant outstrips Chinese consumer demand. As a result, China must export. However, the recessions after 2008 cut heavily into China's exports, severely affecting GDP growth and threatening the stability of the political system. China confronted the problem with a massive surge in bank lending, driving new investment and supporting GDP growth but also fueling rampant inflation. Inflation created upward pressure on labor costs until China began to lose its main competitive advantage over other countries.

The China Syndrome. From here.

For a generation, Chinese growth has been the engine of the global economic system, just as Japan was in the previous generation. China is not collapsing any more than Japan did. However, it is changing its behavior, and with it the behavior of the international system.

Looking Ahead 

If we look at the international system as having three major economic engines, two of them -- Europe and China -- are changing their behavior to be less assertive and less influential in the international system. The events of 2008 did not create these changes; they merely triggered processes that revealed the underlying weaknesses of these two entities.

Somewhat outside the main processes of the international system, the Middle East is undergoing a fundamental shift in its balance of power. The driver in this is not the crisis of 2008 but the consequences of the U.S. was in the region and their termination. With the U.S. withdrawal from Iraq, Iran has emerged as the major conventional power in the Persian Gulf and the major influence over Iraq. In addition, with the continued survival of the al Assad regime in Syria through the support of Iran, there is the potential for Iranian influence to stretch from western Afghanistan to the Mediterranean Sea. Even if the al Assad regime fell, Iran would still be well-positioned to assert its claims for primacy in the Persian Gulf.

Just as the processes unleashed in 1989-1991 defined the next 20 years, so, too, will the processes that are being generated now dominate the next generation. Still powerful but acutely off-balance in its domestic and foreign policies, the United States is confronting a changing world without yet having a clear understanding of how to deal with this world or, for that matter, how the shifts in the global system will affect it. For the United States strategically, the fragmentation of Europe, the transformation of global production in the wake of the Chinese economy's climax, and the dramatically increased power of Iran appear as abstract events not directly affecting the United States.

Each of these events will create dangers and opportunities for the United States that it is unprepared to manage. The fragmentation of Europe raises the question of the future of Germany and its relationship with Russia. The movement of production to low-wage countries will create booms in countries hitherto regarded as beyond help (as China was in 1980) and potential zones of instability created by rapid and uneven growth. And, of course, the idea that the Iranian issue can be managed through sanctions is a form of denial rather than a strategy.

Three major areas of the world are in flux: Europe, China and the Persian Gulf. Every country in the world will have to devise a strategy to deal with the new reality, just as 1989-1991 required new strategies. The most important country, the United States, had no strategy after 1991 and has no strategy today. This is the single most important reality of the world. Like the Spaniards, who, in the generation after Columbus' voyage, lacked a clear sense of the reality they had created, Americans have no clear sense of the world they find themselves in. This fact continues to define how the world works.

Therefore, we next turn to American strategy in the next 20 years and consider how it will reshape itself.


The State of the World: Explaining U.S. Strategy
February 28, 2012 | 1033 GMT
By George Friedman


The fall of the Soviet Union ended the European epoch, the period in which European power dominated the world. It left the United States as the only global power, something for which it was culturally and institutionally unprepared. Since the end of World War II, the United States had defined its foreign policy in terms of its confrontation with the Soviet Union. Virtually everything it did around the world in some fashion related to this confrontation. The fall of the Soviet Union simultaneously freed the United States from a dangerous confrontation and eliminated the focus of its foreign policy.



In the course of a century, the United States had gone from marginal to world power. It had waged war or Cold War from 1917 until 1991, with roughly 20 years of peace between the two wars dominated by the Great Depression and numerous interventions in Latin America. Accordingly, the 20th century was a time of conflict and crisis for the United States. It entered the century without well-developed governmental institutions for managing its foreign policy. It built its foreign policy apparatus to deal with war and the threat of war; the sudden absence of an adversary inevitably left the United States off-balance.

After the Cold War

The post-Cold War period can be divided into three parts. A simultaneous optimism and uncertainty marked the first, which lasted from 1992 until 2001. On one hand, the fall of the Soviet Union promised a period in which economic development supplanted war. On the other, American institutions were born in battle, so to speak, so transforming them for a time of apparently extended peace was not easy. Presidents George HW Bush and Bill Clinton both pursued a policy built around economic growth, with periodic and not fully predictable military interventions in places such as Panama, Somalia, Haiti and Kosovo.

These interventions were not seen as critical to U.S. national security. In some cases, they were seen as solving a marginal problem, such as Panamanian dictator Manuel Noriega's drug trafficking. Alternatively, they were explained as primarily humanitarian missions. Some have sought a pattern or logic to these varied interventions; in fact, they were as random as they appeared, driven more by domestic politics and alliance pressures than any clear national purpose. U.S. power was so overwhelming that these interventions cost relatively little and risked even less.

The period where indulgences could be tolerated ended on Sept. 11, 2001. At that point, the United States faced a situation congruent with its strategic culture. It had a real, if unconventional, enemy that posed a genuine threat to the homeland. The institutions built up during and after World War II could function again effectively. In an odd and tragic way, the United States was back in its comfort zone, fighting a war it saw as imposed on it.

The period from 2001 until about 2007 consisted of a series of wars in the Islamic world. Like all wars, they involved brilliant successes and abject failures. They can be judged one of two ways. First, if the wars were intended to prevent al Qaeda from ever attacking the United States again in the fashion of 9/11, they succeeded. Even if it is difficult to see how the war in Iraq meshes with this goal, all wars involve dubious operations; the measure of war is success. If, however, the purpose of these wars was to create a sphere of pro-U.S. regimes, stable and emulating American values, they clearly failed.

By 2007 and the surge in Iraq, U.S. foreign policy moved into its present phase. No longer was the primary goal to dominate the region. Rather, it was to withdraw from the region while attempting to sustain regimes able to defend themselves and not hostile to the United States. The withdrawal from Iraq did not achieve this goal; the withdrawal from Afghanistan probably will not either. Having withdrawn from Iraq, the United States will withdraw from Afghanistan regardless of the aftermath. The United States will not end its involvement in the region, and the primary goal of defeating al Qaeda will no longer be the centerpiece.

President Barack Obama continued the strategy his predecessor, George W. Bush, set in Iraq after 2007. While Obama increased forces beyond what Bush did in Afghanistan, he nevertheless accepted the concept of a surge -- the increase of forces designed to facilitate withdrawal. For Obama, the core strategic problem was not the wars but rather the problem of the 1990s -- namely, how to accommodate the United States and its institutions to a world without major enemies.

The Failure of Reset

The reset button Hillary Clinton gave to the Russians symbolized Obama's strategy. Obama wanted to reset U.S. foreign policy to the period before 9/11, a period when U.S. interventions, although frequent, were minor and could be justified as humanitarian. Economic issues dominated the period, and the primary issue was managing prosperity. It also was a period in which U.S.-European and U.S.-Chinese relations fell into alignment, and when U.S.-Russian relations were stable. Obama thus sought a return to a period when the international system was stable, pro-American and prosperous. While understandable from an American point of view, Russia, for example, considers the 1990s an unmitigated disaster to which it must never return.


The problem in this strategy was that it was impossible to reset the international system. The prosperity of the 1990s had turned into the difficulties of the post-2008 financial crisis. This obviously created preoccupations with managing the domestic economy, but as we saw in our first installment, the financial crisis redefined the way the rest of the world operated. The Europe, China and Russia of the 1990s no longer existed, and the Middle East had been transformed as well.


During the 1990s, it was possible to speak of Europe as a single entity with the expectation that European unity would intensify. That was no longer the case by 2010. The European financial crisis had torn apart the unity that had existed in the 1990s, putting European institutions under intense pressure along with trans-Atlantic institutions such as NATO. In many ways, the United States was irrelevant to the issues the European Union faced. The Europeans might have wanted money from the Americans, but they did not want 1990s-style leadership.

China had also changed. Unease about the state of its economy had replaced the self-confidence of the elite that had dominated during the 1990s in China. Its exports were under heavy pressure, and concerns about social stability had increased. China also had become increasingly repressive and hostile, at least rhetorically, in its foreign policy.

In the Middle East, there was little receptivity to Obama's public diplomacy. In practical terms, the expansion of Iranian power was substantial. Given Israeli fears over Iranian nuclear weapons, Obama found himself walking a fine line between possible conflict with Iran and allowing events to take their own course.

Limiting Intervention

This emerged as the foundation of U.S. foreign policy. Where previously the United States saw itself as having an imperative to try to manage events, Obama clearly saw that as a problem. As seen in this strategy, the United States has limited resources that have been overly strained during the wars. Rather than attempting to manage foreign events, Obama is shifting U.S. strategy toward limiting intervention and allowing events to proceed on their own.

Strategy in Europe clearly reflects this. Washington has avoided any attempt to lead the Europeans to a solution even though the United States has provided massive assistance via the Federal Reserve. This strategy is designed to stabilize rather than to manage. With the Russians, who clearly have reached a point of self-confidence, the failure of an attempt to reset relations resulted in a withdrawal of U.S. focus and attention in the Russian periphery and a willingness by Washington to stand by and allow the Russians to evolve as they will. Similarly, whatever the rhetoric of China and U.S. discussions of redeployment to deal with the Chinese threat, U.S. policy remains passive and accepting.

It is in Iran that we see this most clearly. Apart from nuclear weapons, Iran is becoming a major regional power with a substantial sphere of influence. Rather than attempt to block the Iranians directly, the United States has chosen to stand by and allow the game to play out, making it clear to the Israelis that it prefers diplomacy over military action, which in practical terms means allowing events to take their own course.

This is not necessarily a foolish policy. The entire notion of the balance of power is built on the assumption that regional challengers confront regional opponents who will counterbalance them. Balance-of-power theory assumes the leading power intervenes only when an imbalance occurs. Since no intervention is practical in China, Europe or Russia, a degree of passivity makes sense. In the case of Iran, where military action against its conventional forces is difficult and against its nuclear facilities risky, the same logic applies.

In this strategy, Obama has not returned to the 1990s. Rather, he is attempting to stake out new ground. It is not isolationism in its classic sense, as the United States is now the only global power. He appears to be engineering a new strategy, acknowledging that many outcomes in most of the world are acceptable to the United States and that no one outcome is inherently superior or possible to achieve. The U.S. interest lies in resuming its own prosperity; the arrangements the rest of the world makes are, within very broad limits, acceptable.

Put differently, unable to return U.S. foreign policy to the 1990s and unwilling and unable to continue the post-9/11 strategy, Obama is pursuing a policy of acquiescence. He is decreasing the use of military force and, having limited economic leverage, allowing the system to evolve on its own.

Implicit in this strategy is the existence of overwhelming military force, particularly naval power.

Europe is not manageable through military force, and it poses the most serious long-term threat. As Europe frays, Germany's interests may be better served in a relationship with Russia. Germany needs Russian energy, and Russia needs German technology. Neither is happy with American power, and together they may limit it. Indeed, an entente between Germany and Russia was a founding fear of U.S. foreign policy from World War I until the Cold War. This is the only combination that could conceivably threaten the United States. The American counter here is to support Poland, which physically divides the two, along with other key allies in Europe, and the United States is doing this with a high degree of caution.


China is highly vulnerable to naval force because of the configuration of its coastal waters, which provides choke points for access to its shores. The ultimate Chinese fear is an American blockade, which the weak Chinese navy would be unable to counter, but this is a distant fear. Still, it is the ultimate American advantage.

Russia's vulnerability lies in the ability of its former fellow members of the Soviet Union, which it is trying to organize into a Eurasian Union, to undermine its post-Soviet agenda. The United States has not interfered in this process significantly, but it has economic incentives and covert influence it could use to undermine or at least challenge Russia. Russia is aware of these capabilities and that the United States has not yet used them.

The same strategy is in place with Iran. Sanctions on Iran are unlikely to work because they are too porous and China and Russia will not honor them. Still, the United States pursues them not for what they will achieve but for what they will avoid -- namely, direct action. Rhetoric aside, the assumption underlying U.S. quiescence is that regional forces, the Turks in particular, will be forced to deal with the Iranians themselves, and that patience will allow a balance of power to emerge.

The Risks of Inaction

U.S. strategy under Obama is classic in the sense that it allows the system to evolve as it will, thereby allowing the United States to reduce its efforts. On the other hand, U.S. military power is sufficient that should the situation evolve unsatisfactorily, intervention and reversal is still possible. Obama has to fight the foreign policy establishment, particularly the U.S. Defense Department and intelligence community, to resist older temptations. He is trying to rebuild the foreign policy architecture away from the World War II-Cold War model, and that takes time.

The weakness in Obama's strategy is that the situation in many regions could suddenly and unexpectedly move in undesirable directions. Unlike the Cold War system, which tended to react too soon to problems, it is not clear that the current system won't take too long to react. Strategies create psychological frameworks that in turn shape decisions, and Obama has created a situation wherein the United States may not react quickly enough if the passive approach were to collapse suddenly.

It is difficult to see the current strategy as a permanent model. Before balances of power are created, great powers must ensure that a balance is possible. In Europe, within China, against Russia and in the Persian Gulf, it is not clear what the balance consists of. It is not obvious that the regional balance will contain emerging powers. Therefore, this is not a classic balance-of-power strategy. Rather it is an ad hoc strategy imposed by the financial crisis and its impact on psychology and by war-weariness. These issues cannot be ignored, but they do not provide a stable foundation for a long-term policy, which will likely replace the one Obama is pursuing now.


The State of the World: Assessing China's Strategy
March 6, 2012 | 0016 GMT
By George Friedman


Simply put, China has three core strategic interests.

Paramount among them is the maintenance of domestic security. Historically, when China involves itself in global trade, as it did in the 19th and early 20th centuries, the coastal region prospers, while the interior of China -- which begins about 160 kilometers (100 miles) from the coast and runs about 1,600 kilometers to the west -- languishes. Roughly two-thirds of all Chinese citizens currently have household incomes lower than the average household income in Bolivia. Most of China's poor are located west of the richer coastal region. This disparity of wealth time and again has exposed tensions between the interests of the coast and those of the interior. After a failed rising in Shanghai in 1927, Mao Zedong exploited these tensions by undertaking the Long March into the interior, raising a peasant army and ultimately conquering the coastal region. He shut China off from the international trading system, leaving China more united and equal, but extremely poor.

The current government has sought a more wealth-friendly means of achieving stability: buying popular loyalty with mass employment. Plans for industrial expansion are implemented with little thought to markets or margins; instead, maximum employment is the driving goal. Private savings are harnessed to finance the industrial effort, leaving little domestic capital to purchase the output. China must export accordingly.

China's second strategic concern derives from the first. China's industrial base by design produces more than its domestic economy can consume, so China must export goods to the rest of the world while importing raw materials. The Chinese therefore must do everything possible to ensure international demand for their exports. This includes a range of activities, from investing money in the economies of consumer countries to establishing unfettered access to global sea-lanes.


The third strategic interest is in maintaining control over buffer states. The population of the historical Han Chinese heartland is clustered in the eastern third of the country, where ample precipitation distinguishes it from the much more dry and arid central and western thirds. China's physical security therefore depends on controlling the four non-Han Chinese buffer states that surround it: Manchuria, Inner Mongolia, Xinjiang and Tibet. Securing these regions means China can insulate itself from Russia to the north, any attack from the western steppes, and any attack from India or Southeast Asia.

Controlling the buffer states provides China geographical barriers -- jungles, mountains, steppes and the Siberian wasteland -- that are difficult to surmount and creates a defense in depth that puts any attacker at a grave disadvantage.

Challenged Interests

Today, China faces challenges to all three of these interests.

The economic downturn in Europe and the United States, China's two main customers, has exposed Chinese exports to increased competition and decreased appetite. Meanwhile, China has been unable to appropriately increase domestic demand and guarantee access to global sea-lanes independent of what the U.S. Navy is willing to allow.

Those same economic stresses also challenge China domestically. The wealthier coast depends on trade that is now faltering, and the impoverished interior requires subsidies that are difficult to provide when economic growth is slowing substantially.

In addition, two of China's buffer regions are in flux. Elements within Tibet and Xinjiang adamantly resist Han Chinese occupation. China understands that the loss of these regions could pose severe threats to China's security, particularly if such losses would draw India north of the Himalayas or create a radical Islamic regime in Xinjiang.

The situation in Tibet is potentially the most troubling. Outright war between India and China -- anything beyond minor skirmishes -- is impossible so long as both are separated by the Himalayas. Neither side could logistically sustain large-scale multi-divisional warfare in that terrain. But China and India could threaten one another if they were to cross the Himalayas and establish a military presence on the either side of the mountain chain. For India, the threat would emerge if Chinese forces entered Pakistan in large numbers. For China, the threat would occur if large numbers of Indian troops entered Tibet.

China therefore constantly postures as if it were going to send large numbers of forces into Pakistan, but in the end, the Pakistanis have no interest in de facto Chinese occupation -- even if the occupation were directed against India. Likewise, the Chinese are not interested in undertaking security operations in Pakistan. The Indians have little interest in sending forces into Tibet in the event of a Tibetan revolution. For India, an independent Tibet without Chinese forces would be interesting, but a Tibet where the Indians would have to commit significant forces would not be. As much as the Tibetans represent a problem for China, the problem is manageable. Tibetan insurgents might receive some minimal encouragement and support from India, but not to a degree that would threaten Chinese control.

So long as the internal problems in Han China are manageable, so is Chinese domination of the buffer states, albeit with some effort and some damage to China's reputation abroad.

The key for China is maintaining interior stability. If this portion of Han China destabilizes, control of the buffers becomes impossible. Maintaining interior stability requires the transfer of resources, which in turn requires the continued robust growth of the Chinese coastal economy to generate the capital to transfer inland. Should exports stop flowing out and raw materials in, incomes in the interior would quickly fall to politically explosive levels. (China today is far from revolution, but social tensions are increasing, and China must use its security apparatus and the People's Liberation Army to control these tensions.)

Maintaining those flows is a considerable challenge. The very model of employment and market share over profitability misallocates scores of resources and breaks the normally self-regulating link between supply and demand. One of the more disruptive results is inflation, which alternatively raises the costs of subsidizing the interior while eroding China's competitiveness with other low-cost global exporters.

For the Chinese, this represents a strategic challenge, a challenge that can only be countered by increasing the profitability on Chinese economic activity. This is nearly impossible for low value-added producers. The solution is to begin manufacturing higher value-added products (fewer shoes, more cars), but this necessitates a different sort of work force, one with years more education and training than the average Chinese coastal inhabitant, much less someone from the interior. It also requires direct competition with the well-established economies of Japan, Germany and the United States. This is the strategic battleground that China must attack if it is to maintain its stability.

A Military Component

Besides the issues with its economic model, China also faces a primarily military problem. China depends on the high seas to survive. The configuration of the South China Sea and the East China Sea render China relatively easy to blockade. The East China Sea is enclosed on a line from Korea to Japan to Taiwan, with a string of islands between Japan and Taiwan. The South China Sea is even more enclosed on a line from Taiwan to the Philippines, and from Indonesia to Singapore. Beijing's single greatest strategic concern is that the United States would impose a blockade on China, not by positioning its 7th Fleet inside the two island barriers but outside them. From there, the United States could compel China to send its naval forces far away from the mainland to force an opening -- and encounter U.S. warships -- and still be able to close off China's exits.

That China does not have a navy capable of challenging the United States compounds the problem. China is still in the process of completing its first aircraft carrier; indeed, its navy is insufficient in size and quality to challenge the United States. But naval hardware is not China's greatest challenge. The United States commissioned its first aircraft carrier in 1922 and has been refining both carrier aviation and battle group tactics ever since. Developing admirals and staffs capable of commanding carrier battle groups takes generations. Since the Chinese have never had a carrier battle group in the first place, they have never had an admiral commanding a carrier battle group.

China understands this problem and has chosen a different strategy to deter a U.S. naval blockade: anti-ship missiles capable of engaging and perhaps penetrating U.S. carrier defensive systems, along with a substantial submarine presence. The United States has no desire to engage the Chinese at all, but were this to change, the Chinese response would be fraught with difficulty.

While China has a robust land-based missile system, a land-based missile system is inherently vulnerable to strikes by cruise missiles, aircraft, unmanned aerial vehicles currently in development and other types of attack. China's ability to fight a sustained battle is limited. Moreover, a missile strategy works only with an effective reconnaissance capability. You cannot destroy a ship if you do not know where it is. This in turn necessitates space-based systems able to identify U.S. ships and a tightly integrated fire-control system. That raises the question of whether the United States has an anti-satellite capability. We would assume that it does, and if the United States used it, it would leave China blind.

China is therefore supplementing this strategy by acquiring port access in countries in the Indian Ocean and outside the South China Sea box. Beijing has plans to build ports in Myanmar, which is flirting with ending its international isolation, and Pakistan. Beijing already has financed and developed port access to Gwadar in Pakistan, Colombo and Hambantota in Sri Lanka, Chittagong in Bangladesh, and it has hopes for a deepwater port at Sittwe, Myanmar. In order for this strategy to work, China needs transportation infrastructure linking China to the ports. This means extensive rail and road systems. The difficulty of building this in Myanmar, for example, should not be underestimated.

But more important, China needs to maintain political relationships that will allow it to access the ports. Pakistan and Myanmar, for example, have a degree of instability, and China cannot assume that cooperative governments will always be in place in such countries. In Myanmar's case, recent political openings could result in Naypyidaw's falling out of China's sphere of influence. Building a port and roads and finding that a coup or an election has created an anti-Chinese government is a possibility. Given that this is one of China's fundamental strategic interests, Beijing cannot simply assume that building a port will give it unrestricted access to the port. Add to this that roads and rail lines are easily sabotaged by guerrilla forces or destroyed by air or missile attacks.

In order for the ports on the Indian Ocean to prove useful, Beijing must be confident in its ability to control the political situation in the host country for a long time. That sort of extended control can only be guaranteed by having overwhelming power available to force access to the ports and the transportation system. It is important to bear in mind that since the Communists took power, China has undertaken offensive military operations infrequently -- and to undesirable results. Its invasion of Tibet was successful, but it was met with minimal effective resistance. Its intervention in Korea did achieve a stalemate but at horrendous cost to the Chinese, who endured the losses but became very cautious in the future. In 1979, China attacked Vietnam but suffered a significant defeat. China has managed to project an image of itself as a competent military force, but in reality it has had little experience in force projection, and that experience has not been pleasant.

Internal Security vs. Power Projection

The reason for this inexperience stems from internal security. The People's Liberation Army (PLA) is primarily configured as a domestic security force -- a necessity because of China's history of internal tensions. It is not a question of whether China is currently experiencing such tensions; it is a question of possibility. Prudent strategic planning requires building forces to deal with worst-case situations. Having been designed for internal security, the PLA is doctrinally and logistically disinclined toward offensive operations. Using a force trained for security as a force for offensive operations leads either to defeat or very painful stalemates. And given the size of China's potential internal issues and the challenge of occupying a country like Myanmar, let alone Pakistan, building a secondary force of sufficient capability might not outstrip China's available manpower but would certainly outstrip its command and logistical capabilities. The PLA was built to control China, not to project power outward, and strategies built around the potential need for power projection are risky at best.

It should be noted that since the 1980s the Chinese have been attempting to transfer internal security responsibilities to the People's Armed Police, the border forces and other internal security forces that have been expanded and trained to deal with social instability. But despite this restructuring, there remain enormous limitations on China's ability to project military power on a scale sufficient to challenge the United States directly.

There is a disjuncture between the perception of China as a regional power and the reality. China can control its interior, but its ability to control its neighbors through military force is limited. Indeed, the fear of a Chinese invasion of Taiwan is unfounded. It cannot mount an amphibious assault at that distance, let alone sustain extended combat logistically. One option China does have is surrogate guerrilla warfare in places like the Philippines or Indonesia. The problem with such warfare is that China needs to open sea-lanes, and guerrillas -- even guerrillas armed with anti-ship missiles or mines -- can at best close them.

Political Solution

China therefore faces a significant strategic problem. China must base its national security strategy on what the United States is capable of doing, not on what Beijing seems to want at the moment. China cannot counter the United States at sea, and its strategy of building ports in the Indian Ocean suffers from the fact that its costs are huge and the political conditions for access uncertain. The demands of creating a force capable of guaranteeing access runs counter to the security requirements inside China itself.

As long as the United States is the world's dominant naval power, China's strategy must be the political neutralization of the United States. But Beijing must make certain that Washington does not feel so pressured that it chooses blockade as an option. Therefore, China must present itself as an essential part of U.S. economic life. But the United States does not necessarily see China's economic activity as beneficial, and it is unclear whether China can maintain its unique position with the United States indefinitely. Other, cheaper alternatives are available. China's official rhetoric and hard-line stances, designed to generate nationalist support inside the country, might be useful politically, but they strain relations with the United States. They do not strain relations to the point of risking military conflict, but given China's weakness, any strain is dangerous. The Chinese feel they know how to walk the line between rhetoric and real danger with the United States. It is still a delicate balance.

There is a perception that China is a rising regional and even global power. It may be rising, but it is still far from solving its fundamental strategic problems and further yet from challenging the United States. The tensions within China's strategy are certainly debilitating, if not fatal. All of its options have serious weaknesses. China's real strategy must be to avoid having to make risky strategic choices. China has been fortunate for the past 30 years being able to avoid such decisions, but Beijing utterly lacks the tools required to reshape that environment. Considering how much of China's world is in play right now -- Sudanese energy disputes and Myanmar's political experimentation leap to mind -- this is essentially a policy of blind hope.


The State of the World: Germany's Strategy
March 12, 2012 | 2217 GMT
By George Friedman

The idea of Germany having an independent national strategy runs counter to everything that Germany has wanted to be since World War II and everything the world has wanted from Germany. In a way, the entire structure of modern Europe was created to take advantage of Germany's economic dynamism while avoiding the threat of German domination. In writing about German strategy, I am raising the possibility that the basic structure of Western Europe since World War II and of Europe as a whole since 1991 is coming to a close.

If so, then the question is whether historical patterns of German strategy will emerge or something new is coming. It is, of course, always possible that the old post-war model can be preserved. Whichever it is, the future of German strategy is certainly the most important question in Europe and quite possibly in the world.

Origins of Germany's Strategy

Before 1871, when Germany was fragmented into a large number of small states, it did not pose a challenge to Europe. Rather, it served as a buffer between France on one side and Russia and Austria on the other. Napoleon and his campaign to dominate Europe first changed the status of Germany, both overcoming the barrier and provoking the rise of Prussia, a powerful German entity. Prussia became instrumental in creating a united Germany in 1871, and with that, the geopolitics of Europe changed.

What had been a morass of states became not only a unified country but also the most economically dynamic country in Europe -- and the one with the most substantial ground forces. Germany was also inherently insecure. Lacking any real strategic depth, Germany could not survive a simultaneous attack by France and Russia. Therefore, Germany's core strategy was to prevent the emergence of an alliance between France and Russia. However, in the event that there was no alliance between France and Russia, Germany was always tempted to solve the problem in a more controlled and secure way, by defeating France and ending the threat of an alliance. This is the strategy Germany has chosen for most of its existence.

The dynamism of Germany did not create the effect that Germany wanted. Rather than split France and Russia, the threat of a united Germany drew them together. It was clear to France and Russia that without an alliance, Germany would pick them off individually. In many ways, France and Russia benefited from an economically dynamic Germany. It not only stimulated their own economies but also provided an alternative to British goods and capital. Nevertheless, the economic benefits of relations with Germany did not eliminate the fear of Germany. The idea that economics rule the decisions of nations is insufficient for explaining their behavior.

Prime Minister Winston Churchill gives the "Victory" sign
to crowds in London on Victory in Europe Day.
(Photo credit: Wikipedia)

Germany was confronted with a strategic problem. By the early 20th century the Triple Entente, signed in 1907, had allied Russia, France and the United Kingdom. If they attacked simultaneously at a time of their choosing, these countries could destroy Germany. Therefore, Germany's only defense was to launch a war at a time of its choosing, defeat one of these countries and deal with the others at its leisure. During both World War I and World War II, Germany first struck at France and then turned to deal with Russia while keeping the United Kingdom at bay. In both wars, the strategy failed. In World War I, Germany failed to defeat France and found itself in an extended war on two fronts. In World War II, it defeated France but failed to defeat Russia, allowing time for an Anglo-American counterattack in the west.

Binding Germany to Europe

Germany was divided after World War II. Whatever the first inclinations of the victors, it became clear that a rearmed West Germany was essential if the Soviet Union was going to be contained. If Germany was to be rearmed, its economy had to be encouraged to grow, and what followed was the German economic miracle. Germany again became the most dynamic part of Europe.

The issue was to prevent Germany from returning to the pursuit of an autonomous national strategy, both because it could not resist the Soviet forces to the east by itself and, more important, because the West could not tolerate the re-emergence of divisive and dangerous power politics in Europe. The key was binding Germany to the rest of Europe militarily and economically. Put another way, the key was to make certain that German and French interests coincided, since tension between France and Germany had been one of the triggers of prior wars since 1871. Obviously, this also included other Western European countries, but it was Germany's relationship with France that was most important.

Militarily, German and French interests were tied together under the NATO alliance even after France withdrew from the NATO Military Committee under Charles de Gaulle. Economically, Germany was bound with Europe through the emergence of more sophisticated multilateral economic organizations that ultimately evolved into the European Union.

After World War II, West Germany's strategy was threefold. First, it had to defend itself against the Soviet Union in concert with an alliance that would effectively command its military through NATO. This would limit German sovereignty but eliminate the perception of Germany as a threat. Second, it would align its economy with that of the rest of Europe, pursuing prosperity without undermining the prosperity of other countries. Third, it would exercise internal political sovereignty, reclaiming its rights as a nation without posing a geopolitical threat to Western Europe. After the fall of the Soviet Union, this was extended to include Eastern European states.

The strategy worked well. There was no war with the Soviets. There was no fundamental conflict in Western Europe and certainly none that was military in nature. The European economy in general, and the German economy in particular, surged once East Germany had been reintegrated with West Germany. With reintegration, German internal sovereignty was insured. Most important, France remained linked to Germany via the European Union and NATO. Russia, or what was left after the collapse of the Soviet Union, was relatively secure so long as Germany remained part of European structures. The historical strategic problem Germany had faced appeared solved.

Europe's Economic Crisis

The situation became more complex after 2008. Germany's formal relationship with NATO remained intact, but without the common threat of the Soviet Union, the alliance was fracturing over the divergent national interests of its members. The European Union had become Germany's focus, and the bloc had come under intense pressure that made the prior alignment of all European countries more dubious. Germany needed the European Union. It needed it for the reasons that have existed since World War II: as a foundation of its relationship with France and as a means to ensure that national interest would not generate the kinds of conflicts that had existed in the past.

It needed the European Union for another reason as well. Germany is the second-largest exporter in the world. It exports to many countries, but Europe is a critical customer. The free-trade zone that was the foundation of the European Union was also one of the foundations of the German economy. Protectionism in general, but certainly protectionism in Europe, threatened Germany, whose industrial plant substantially outstripped its domestic consumption. The pricing of the euro aided German exports, and regulations in Brussels gave Germany other advantages. The European Union, as it existed between 1991 and 2008, was critical to Germany.

However, the European Union no longer functions as it once did. The economic dynamics of Europe have placed many countries at a substantial disadvantage, and the economic crisis of 2008 triggered a sovereign debt crisis and banking crisis in Europe.

There were two possible solutions in the broadest sense. One was that the countries in crisis impose austerity in order to find the resources to solve their problem. The other was that the prosperous part of Europe underwrites the debts, sparing these countries the burden of austerity. The solution that has been chosen is obviously a combination of the two, but the precise makeup of that combination was and remains a complex matter for negotiation.

Germany needs the European Union to survive for both political and economic reasons. The problem is that it is not clear that a stable economic solution can emerge that will be supported by the political systems in Europe.

Germany is prepared to bail out other European countries if they impose austerity and then take steps to make sure that the austerity is actually implemented to the degree necessary and that the crisis is not repeated. From Germany's point of view, the roots of the crisis lie in the fiscal policies of the troubled countries. Therefore, the German price for underwriting part of the debt is that European bureaucrats, heavily oriented toward German policies, be effectively put in charge of the finances of countries receiving aid against default.

This would mean that these countries would not control either taxes or budgets through their political system. It would be an assault on democracy and national sovereignty. Obviously, there has been a great deal of opposition from potential recipients of aid, but it is also opposed by some countries that see it as something that would vastly increase the power of Germany. If you accept the German view, which is that the debt crisis was the result of reckless spending, then Germany's proposal is reasonable. If you accept the view of southern Europe, which is that the crisis was the result of the European Union's design, then what Germany is proposing is the imposition of German power via economics.

It is difficult to imagine a vast surrender of sovereignty to a German-dominated EU bureaucracy, whatever the economic cost. It is also difficult to imagine Germany underwriting the debt without some controls beyond promises; even if the European Union is vitally important to the Germans, German public opinion will not permit it. Finally, it is difficult to see how, in the long term, the Europeans can reconcile their differences on this issue. The issue must come to a head, if not in this financial crisis then in the next -- and there is always a next crisis.

An Alternative Strategy

In the meantime, the basic framework of Europe has changed since 1991. Russia remains a shadow of the Soviet Union, but it has become a major exporter of natural gas. Germany depends on that natural gas even as it searches for alternatives. Russia is badly in need of technology, which Germany has in abundance. Germany does not want to invite in any more immigrants out of fear of instability. However, with a declining population, Germany must do something.

Russia also has a declining population, but even so, it has a surplus of workers, both unemployed and underemployed. If the workers cannot be brought to the factories, the factories can be brought to the workers. In short, there is substantial synergy between the Russian and German economies. Add to this that the Germans feel under heavy pressure from the United States to engage in actions the Germans want to be left out of, while the Russians see the Americans as a threat to their interests, and there are politico-military interests that Germany and Russia have in common.

NATO is badly frayed. The European Union is under tremendous pressure and national interests are now dominating European interests. Germany's ability to use the European Union for economic ends has not dissipated but can no longer be relied on over the long term. Therefore, it follows that Germany must be considering an alternative strategy. Its relationship with Russia is such a strategy.

Germany is not an aggressive power. The foundation of its current strategy is its relationship with France in the context of the European Union. The current French government under President Nicolas Sarkozy is certainly committed to this relationship, but the French political system, like those of other European countries, is under intense pressure. The coming elections in France are uncertain, and the ones after that are even less predictable. The willingness of France to engage with Germany, which has a massive trade imbalance with France, is an unknown.

However, Germany's strategic interest is not necessarily a relationship with France but a relationship with either France or Russia to avoid being surrounded by hostile powers. For Germany, a relationship with Russia does as well as one with France. An ideal situation for Germany would be a Franco-German-Russian entente. Such an alliance has been tried in the past, but its weakness is that it would provide too much security to Germany, allowing it to be more assertive. Normally, France and Russia have opposed Germany, but in this case, it is certainly possible to have a continuation of the Franco-German alliance or a Russo-French alliance. Indeed, a three-way alliance might be possible as well.

Germany's current strategy is to preserve the European Union and its relationship with France while drawing Russia closer into Europe. The difficulty of this strategy is that Germany's trade policies are difficult for other European countries to manage, including France. If Germany faces an impossible situation with the European Union, the second strategic option would be a three-way alliance, with a modified European Union or perhaps outside of the EU structure. If France decides it has other interests, such as its idea of a Mediterranean Union, then a German-Russian relationship becomes a real possibility.

A German-Russian relationship would have the potential to tilt the balance of power in the world. The United States is currently the dominant power, but the combination of German technology and Russian resources -- an idea dreamt of by many in the past -- would become a challenge on a global basis. Of course, there are bad memories on both sides, and trust in the deepest sense would be hard to come by. But although alliances rely on trust, it does not necessarily have to be deep-seated trust.

Germany's strategy, therefore, is still locked in the EU paradigm. However, if the EU paradigm becomes unsupportable, then other strategies will have to be found. The Russo-German relationship already exists and is deepening. Germany thinks of it in the context of the European Union, but if the European Union weakens, Russia becomes Germany's natural alternative.

Additional Article of Interest:

The Rise of Regionalism in Japan
March 26, 2012 | 1323 GMT
By Stratfor

The Japanese political system may be on the verge of a radical shift. The popularity of the country’s established national political parties, the ruling Democratic Party of Japan (DPJ) and opposition Liberal Democratic Party (LDP), is at a historic low, coinciding with record numbers of voters identifying themselves as independents.

At the same time, regional parties campaigning against entrenched Japanese bureaucratic interests are making gains and readying themselves for national elections. If they find success there, it could signify the first major change in the country’s political system since World War II, which in turn would have a significant effect on regional dynamics.

Analysis

According to a late February poll by Fuji TV, only 32 percent of Japanese voters support the Cabinet of Prime Minister Yoshihiko Noda, and only 16.6 percent say they would vote for the DPJ in the next round of parliamentary elections. The LDP is faring little better, with the support of only 21.4 percent of voters.

Meanwhile, regional political parties have begun to win elections. In late 2010, Genzei Nippon (“tax reduction Japan”) won Aichi prefecture’s governorship as well as the mayorship in Nagoya and a majority in its city assembly. Then in 2011, Osaka Ishin no Kai (“Osaka Restoration Association”) won Osaka prefecture’s governorship, Osaka city’s mayorship and majorities in both the prefectural and city assemblies.

Since these elections, the parties’ popularity has dramatically increased, particularly that of Osaka Ishin no Kai and its leader, Osaka mayor Toru Hashimoto, who is seeing a 60 percent approval rating in national polls. These parties are now readying themselves for the next round of lower-house parliamentary elections, set to occur before Aug. 30, 2013. Some have started “politics schools” — seminars where they prepare future candidates to run for parliament — and they have drawn important numbers of aspiring students, some of them lawmakers from the major national parties. Several mainstream political figures also have shown willingness to join Hashimoto should he enter national politics, most notably popular Tokyo Gov. Shintaro Ishihara.

Hashimoto and Ishihara’s prominent positions in regions that have served as historical Japanese power centers have given rise to expectations that they will unite to form a coalition or even a national party. However, their potential for national electoral success is uncertain, as is their ability to execute an agenda of reform in the midst of a Japanese bureaucracy that has been able to resist such efforts for the past two decades.

Past Reform Movements

Reform efforts have been gradually gaining popularity over the past 20 years. These movements have had varied goals, ranging from calls for a federal Japan, economic liberalization, cutting down the bureaucracy, educational reform, and releasing the country from its dependence on the United States for defense.

These also have come in many forms. The first was in 1993 when the LDP was ousted by a broad, anti-status quo coalition of seven minority parties. The coalition came together specifically to eject the LDP, without a clear consensus for what to do after it achieved that goal. Rifts among coalition members eventually began to show, and it stayed in power for only eight months.

Then in 2001, LDP member Junichiro Koizumi rose to the premiership on a platform of “restructuring without sanctuary,” meaning breaking the control over the country by the entrenched bureaucracy by reducing the size of government and instituting a reorganization of the administrative apparatus, including increasing regional governance. Koizumi campaigned as a reform-minded outsider who would battle the entrenched interests of the bureaucratic apparatus. His tenure represented the first real attempt at reform and regionalization. Along with privatization efforts, several proposals for a federal Japan surfaced during this period, and laws designed to further the regionalization project were passed. The bureaucracy, and those with interests in the bureaucracy, proved too strong, and Koizumi’s efforts ultimately had little effect in the short term. But his policies and his popularity paved the way for the rise of the current wave of regionalism.

The Geography of Regionalism

The dynamics behind both Japan’s entrenched bureaucracy and the increasingly popular regional forces are rooted in the country’s mountainous geography. Geography divides Japan into several distinct regions, engendering recurrent center-periphery political tensions and inter-regional conflicts. This has given rise to a historical pattern wherein power in the country is regionalized or centralized, generally through a chaotic process, followed by a long period of relative stability.

The most notable iteration of this pattern was the end of the Tokugawa shogunate, which ruled Japan from the early 1600s to the 1860s. Under the shogunate, the military held the highest authority, but political and economic administration of most domains was left to individual lords. The central government tightly controlled international affairs and trade, greatly restricting the inflow of international goods and information. This system ended with the Meiji Restoration of 1868, which once again centralized control of Japan under the emperor through the intervention of regional forces disaffected with the Tokugawa regime and emboldened by its weakness. The Meiji Restoration also gave rise to an aggressive, expansionist foreign policy.

This centralization continued for the next 50 years and intensified in the late 1920s, when Japan was stricken with economic downturn, international trade disturbances, such as increased protectionist sentiment, and the threat of communist revolt. The central government increased its power over the following period, and its foreign policy became more aggressive. Japan’s defeat in World War II put a relatively quick end to the military aspect of this policy, but it continued its economic expansion, growing to become the world’s second-largest economy in the 1980s.

However, Japan’s economic model was not without faults. The government effectively controlled the economy and international trade, protected domestic agriculture and industry from international competition and aligned itself closely with these industries and banks. Its economic bubble burst in 1989, and the ensuing economic stagnation has continued until the present, made worse by an entrenched bureaucracy reluctant to allow needed reforms that would strip those in power of their status and benefits. Public frustration with this stagnation and perceived bureaucratic corruption has fueled the current rise of regional parties.

Constraints and Potential

These parties have several obstacles to overcome before becoming a true national political force, foremost among them being the established political parties. The DPJ and LDP are reacting to the regionalists by co-opting parts of their platforms, such as electoral reform, chastisement, reform of utilities and most prominently, the passing of legislation that would allow unified regional governments to be created. Also, it is unclear whether a majority of Japanese voters is in favor of radical reform or simply against the current status quo.

Even if these parties do well in national elections, it does not guarantee that they will be able to effect real change in the face of entrenched bureaucratic interests. Though a regionalist third party would go a long way in changing the political makeup of Japan’s parliament, most of the reforms sought by the reformists require either large majorities in parliament or outright constitutional change. This threatens to slow down the pace of reform, making the bureaucracy more likely to absorb this wave of reformers as it has done in the past.

However, these changes could have tremendous regional implications. If the regionalists’ economic project succeeds, it could lead to a resurgence of Japanese economic dynamism that will have effects throughout East Asia. An internally strengthened, economically revitalized and externally emboldened Japan would raise concern in China, which would find itself compelled to counter Japan both diplomatically and militarily, and in South Korea, which would feel threatened between an increasingly competitive Tokyo and Beijing. Japan likely would increase its involvement in maritime issues in the East China Sea and South China Sea, and even farther abroad in the Indian Ocean and Persian Gulf. Japan’s involvement may not necessarily be of an overt military nature, but China will feel pressured in these areas even if Japan simply increases its economic influence. Moreover, a Japanese rise would make it less dependent on the United States and thus less deferential to Washington’s policies, while South Korea may become increasingly dependent on U.S. involvement in the region in the face of two powerful neighbors. Other Southeast Asian states, such as the Philippines or Vietnam, would find a convenient ally in its disputes with China over sea rights.

A situation when both Japan and China are strong and externally active has not been seen in the region for a few generations, and the regionalist movement may just make that happen. If these reforms give rise to nationalist sentiment in Japan, tensions are sure to increase in a region with a history of resentment and mutual fear.